Voice Peering

With remarkably excellent - if accidental - timing in view of both the Icelanic volcano eruptions and the likewise disruptive and costly Greek economic crisis, Frost and Sullivan predicts that the European videoconferencing endpoints markets will reach over $1.03 billion by 2015 from $383.6 million in 2009: an 18 percent compound annual growth rate. The report, 'European Videoconferencing Endpoints Market' covers group systems and executive desktop systems videophones in both HD/SD modes.

Companies globally have significantly changed their way of undertaking business on a day-to-day basis, since the beginning of the economic crisis, says Frost and Sullivan. Limited travel budgets have impelled firms to seek new means of communication and collaboration. The reduction in the number of regular in-person meetings has given rise to innovative tools, such as videoconferencing that enable companies to build and consolidate business relations while saving time and money.

The major growth factors of the videoconferencing endpoints market in Europe include the need for companies to decrease travel expenses, search for alternative ways to meet their workers and clients and the stringent environment policies imposed by the European Parliament. Additionally, videoconferencing is stepping up the decision-making process and enhancing teamwork in the more-than-ever dispersed workforce.

European Union member state residents have labor mobility, say other observers, permitting them to live and work in the different countries. Videoconferencing permits say Britons living in Spain: which is popular on account of the weather and quality of life to interact with their companies back in the U.K. In contrast, NAFTA maintains strict limits on labor mobility. Canadians from wintry Ontario and Quebec cannot live and work in sunny Florida unless they have U.S. citizenship, permanent residency or employer-sponsored visas.

What makes the videoconferencing projections all the more significant is Europe's excellent and expanding high-speed rail (HSR) network that provides lower-cost and greener alternatives to air and road travel while readily permitting enroute work via Internet connections. Only Japan but soon China has a similar rail system: and Internet connectivity. Also many European countries' cultures are very much-face-to-face focused.

'The videoconferencing endpoints market has been witnessing a slow transformation in the recent years, largely attributed to the introduction of high-quality products, such as high-definition conferencing and telepresence, the market's shift towards converged audio, video and web conferencing solutions, and integration with other existing collaborative applications,' states Iwona Petruczynik, Frost and Sullivan Research Analyst.

However, the European videoconferencing endpoints market is restrained by several factors, says the analyst firm. For example, the misconception that videoconferencing services are communications tools used only by large enterprises is hindering the adoption among small and medium businesses. Moreover, new communications and collaboration vendors are delivering videoconferencing as a part of a unified solution, creating a one-stop-shop for their customers; however, this is hampering the growth of standalone videoconferencing providers. Poor infrastructure and low bandwidth, especially in the central and eastern Europe also have adverse effects on the videoconferencing endpoints market growth.

'The two main challenges with which the market is constantly battling are - the long-standing belief that videoconferencing is a complicated tool, reserved only for the top level management in large enterprises, and the rise of unified communications (UC), where audio, web, and video-conferencing tools are converging,' says Petruczynik.

Overcoming the first barrier is a constant challenge for vendors. However, with the recession spurring the growth of videoconferencing, these collaboration tools and their benefits have been brought to the fore, especially their increasing ease of use. Videoconferencing vendors should be able to proactively address their clients' needs and evolve constantly in this market. The trend of shifting towards UC is leading to an increased attention to the adoption and usage of visual collaboration in business.

'The rough economic climate that is promoting the importance of reducing expenditure, is creating a greater awareness about visual collaboration among enterprises,' notes Petruczynik. 'A vast number of conferencing service providers and equipment vendors are developing visual collaboration systems capabilities as a one-stop-shop for their clients.'

Brendan B. Read is TMCnet's Senior Contributing Editor. To read more of Brendan's articles, please visit his columnist page.

Edited by Stefania Viscusi